Where Africa and Technology Collide!

Tag: entrepreneurship

The Tony Elumelu Foundation has set an ambitious goal, “…to create 1 million jobs and $10 billion in annual revenue in Africa.”

They are choosing 1,000 entrepreneurs from across Africa to be a part of the new TEEP program, and they plan to do 1,000 more each year for 10 years – that’s 10,000 entrepreneurs total. Not a small number. If you do the math, this works out to $10,000 per entrepreneur, so it can’t be about funding as much as it is about learning.

Not enough successful African entrepreneurs are using their money to invest in other younger entrepreneurs. Those that do tend to be greedy with the percentage they ask for, so many entrepreneurs look to capital from the US and EU to use to grow their companies.

However, this could all be changing, if this program works and sends a message to other African high net worth individuals. This is one of the strongest moves by any African to invest back into other newer/younger African entrepreneurs, if not the strongest. Tony Elumelu has always been at the forefront of giving to the next generation, so it’s not a surprise that he leads on this as well.

Scalability: Demonstrates potential for replication and growth of their product or service to create jobs and wealth (10 points);

Leadership Potential and Entrepreneurial Skills: Applicant has demonstrated leadership potential, capable of attracting people, customers and resources. Also exhibits strong passion and commitment for the business (25 points).

The Program

Digging a little deeper into the terms and conditions doc (see Section 9), and the program unfolds a bit more. It looks like there is $5000 set aside for each entrepreneurs part in the program, and another $5000 as a direct amount injected into their business. Finally, if you do your 3 reports and take part in all of your mentorship sessions, then another returnable $5000 can be given to you.

There seems to be three main parts to the program:

Online – 12-week online skills learning assignments.

Mentoring, where we are assured, “The Mentors are required to sign a non-disclosure agreement as it relates to personal information which may come into their possession during the Programe and are committed to maintaining the highest ethical standards when mentoring.”

3-day boot camp and Elumelu Entrepreneurship Forum – where you are physically in Nigeria (costs for travel/lodging are covered by the program, which is where that initial $5000 goes).

In Conclusion

My thinking is that they’re going a bit broad on this. After what I’ve seen within the iHub community and as a partner in the Savannah Fund, I’m not sure that $10k is enough. It would have made more sense for me to see them go with 100 entrepreneurs a year, where each has a chance at $100,000. However, if any organization is going to make it work, I believe the Tony Elumelu Foundation can.

My guess is that they are going to focus on smaller, very early stage startups that largely aren’t tech related. A leg-up of $5,000 to a single guy trying to start a small business outside of a major city can go far with that amount.

Becky Wanjiku sits on the iHub Advisory Board with me, and started a discussion on the iHub, asking “What has the iHub Achieved?“. Her main takeaway point being that the iHub is a platform, and it’s what YOU do with it that is important. T

he iHub started in March 2010, so it’s been about 3.5 years and a lot has happened here in the intervening years. Many people ask me, “so, what has the iHub done?” The best way I could think of to answer that is to just list as much as I could think of, so here’s a rather exhaustive list, though I’m sure that I’m missing some things.

Why Tech Hubs in Africa Exist

Nairobi tech community working at the iHub, circa 2011

Before I get into that though, maybe a framing on why tech hubs exist is important. They’re not just there for startups, in fact our thoughts on incubation and products going back to 2010 was just pre-incubation and connecting to other businesses and investors. Places like the iHub exist to connect this community together, while we get involved in other gaps that exist in the market (UX, incubation, research, etc), these are just part of providing a place where serendipity happens for those who are involved across the network.

These spaces are more than just nurturing talented entrepreneurs, and to not see that means you’re missing the bigger picture on why they exist. They’re not only about entrepreneurs, though we have seen some of them grow from nothing to 40-person orgs that run across multiple countries.

The tech hubs in Africa are more than just places focused on products, much of what goes on is about connecting the people within the tech community in that area to each other and to the greater global industry. For instance, we started Pivot in East Africa, an annual event that does two things: First, it created a culture where the entrepreneurs learned how to pitch their products. Second, it gave a reason for local and global investors and media to come and see what’s going on. Both funding and media coverage have resulted.

Another example is the connecting of global tech companies to local developers, the training that comes out of it for everyone from network operators to Android devs. Google, Samsung and Intel all play strongly in that space.

Some work at increasing the viability and skillsets of freelancers. Whether they’re web designers or PHP software engineers increasing their understanding of how to setup a company, know what IP law is about, take training on project management or quality assurance testing – these all add up to a community that is evolving and becoming more professional.

Those are just a few of the things that tech hubs do across Africa. I can speak for the iHub in Kenya, but know that there are others such as ccHub in Nigeria, Banta Labs in Senegal, ActivSpaces in Cameroon and the other 19 tech hubs in the Afrilabs network are all doing amazing things that create a base for new innovative products, services and models to grow out of. There are new models for ecosystem development around tech in Africa revolving around these technology hubs that are, and will breed, more innovation over time.

New initiatives and organizations from the iHub:

m:lab – first tech incubator in Kenya (2011)Mobile testing room – all the tablets and phones from the manufacturers (2011)iHub Research – tech focused research arm (2011)UX Lab – first user experience lab in East Africa (2012)iHub Consulting – an effort to connect freelancers to training and businesses (2012)Savannah Fund – a funding and accelerator program (2012)Cluster – first open supercomputer cluster in East Africa (2013)Gearbox – an open makerspace for rapid prototyping (2013)Code FC – iHub Football ClubVolunteer Network team – the iHub internet network was setup, and is run by, volunteers

Not all groups start their company at the iHub, but they do meet their future business partners there. The Rupu founders met at an iHub event, and subsequently went on to grow their business, the same is true of companies like Skyline Design, and probably many others who we don’t even know about.

We have a Policy Formulation Team which consists of Jessica Musila, Martin Obuya Paul Muchene, and Jimmy Gitonga. Each one of us sits or has sat through a policy formulation process, such as the AU CyberSecurity (Martin and Paul) and MySociety, Mzalendo (Jessica Musila) and National Broadband Strategy (Jimmy Gitonga).

Outreach events

Egerton University
Catholic University
Kabarak University (Nakuru)
JKUAT (Juja)
Dedan Kimathi (Nyeri)
Maseno University
Nelson Mandela University – Arusha
Strathmore / Intel
University of Nairobi – School of Computing and Informatics

A phone booth graveyard, displaced by the mobile phone, in Lamu, Kenya

I was recently asked, “how do you find innovators?” It’s an odd question really, one that I hadn’t thought about before, but one that is valuable to think through. You have to dig deeper and think why innovations happen at all, and what the power structures are that make them be identified as innovative. After all, innovation is just a new way of doing things than what is currently the norm.

In any industry, society or business there are status quo powers at play. These are generally legacy structures, setup for a time and place that needed that design. Think big media in broadcasting and print, how has it been disrupted by the internet, mobiles and social media in the last 10 years? How about government? How about the humanitarian space? How about the energy industry?

All of these industries were seen as “innovative” when they came into their own, decades and centuries ago. Now they are legacy in both infrastructure and design, and their relevancy in their current state is in question. By their nature they fight to maintain the power structures that keep them in the position that they hold. Changes to the foundations on which they stand is not only scary, it’s deadly.

Innovation comes from the edges, so it comes as no surprise that innovators are found in the margins. They are the misfits among us, the ones who see and do things differently. They challenge the status quo and the power sources that prop that up, so are generally marginalized as a reflexive and defensive action.

Think about what you’re really asking for when you say you want innovation in your space. Because, when you do, you’re asking for the outliers, the disruptors and the rebels to have their way. You’re asking for a new way of thinking and doing – and if you’re in a position of power within an industry, you’re likely going to be upset along the way.

Innovation and Social Entrepreneurs

I’m still not sure that I buy into this term (but that’s a longer discussion for another time).

All successful social entrepreneurs are innovators, though all innovators aren’t social entrepreneurs. This space is being defined as one where the innovation has to be something that empowers the disempowered, strengthens the weak, or enriches the lives of the poor. These are loose boundaries, but ones that allow the subjectivity of founders and funders to define their work. Since it’s fairly new, this works for everyone quite well.

At the end of the day what I do, and what the other social entrepreneurs that I’ve gotten to know over the years do, is disrupt something. Simply put, we’re working from the outside, or the edges of an industry, with less money and less buy in, trying to change the way that it works. Sometimes undermining it entirely, sometimes coming up with new markets and new industries, all in our search for a better way.

On Funding Innovation

Many of the people who say they want change, and aren’t happy with the current solutions found in the world, aren’t actually serious about wanting that change. It’s lip service. There are very few funders and forums for game changers to be heard and for them to find funding to take their idea, product or service to market. The same people who say that they don’t want the same traditional approach, apply traditional ways of thinking to finding and funding innovators.

There is precious little innovation in the funding space, even as these same funders look to find the next organization that will turn the world on its head. In a space overflowing with grand claims of disruption, which funders are actually that themselves? How many “social impact” funders actually fund anything? In the social entrepreneurs world, it’s a lot less painful to get funding from traditional VCs and angels than it is this new social impact investor type.

I can think of a few funding organizations that actually try new things, and can count them on one hand: Skoll, Omidyar Network, Knight, Indigo Trust. I’ve probably missed a couple, but you get the drift, this isn’t an area where people are changing with the times.

There are really two big issues at stake. First, how to find the right people. Second, what funding level is needed.

Boots on the ground

You’re not going to find the compelling African entrepreneurs while sitting in an office in the US or Europe. It’s only by spending significant time on the ground in the countries you’re wanting to invest in that you find the people you need to know. It’s there that you get past the first-level of non-expert opportunity profiteers and attention seekers and find the people who actually do the work.

Two examples:

AfriGadget is a blog about finding interesting stories of African innovation. It’s not always easy to come up with the stories though. You have to look hard, teach yourself to see things, in order to find these extraordinary individuals. Without the great blogging team and the people sending in stories from the ground, we wouldn’t have anything.

I grew up in Nairobi, yet it took me a solid two years of meeting people and networking within the city to get beneath the surface and find the people with the talent and drive to create actual businesses.

It’s generally not cost-effective for every funding source to have their own person canvassing the continent. The question then becomes, how do you find the trusted intermediaries who know the real story on the ground, know the players and can spot the talent?

The seed (angel) funding gap

Most of the individuals with the skills to create their own businesses in the high-tech space are working for large NGOs and multinationals. Why? They got to a place in their life where they had to make the choice of going out on their own, armed with a good idea and no hope of funding, or putting food on the table. This is similar to entrepreneurs worldwide, however in Africa the gap between success and failure is a lot less forgiving and the choices are a lot fewer.

Most of the funding available for companies in Africa comes through loans, debt financing. It’s mostly used in SMEs at the medium-sized level. There’s a gap, and that is seed funding. There are very few opportunities to get equity-based funding, especially at the levels where most entrepreneurs starting off need it. This is the $10-300k range.

Who funds them? There are a few organizations internationally who run business plan competitions with money prizes, others that fund a few startups each year (TechnoServe, Kuv and Acumen come to mind). There are also some local people and organizations that do some of the funding (as was the case for Agosta Liko pictured above), but it’s very hard to come by even within Africa’s most advanced tech/finance cities (Nairobi, Johannesburg and Accra).